BENSALEM PA – The downturn in the U.S. housing market has given home-builders an opportunity to reinvent themselves, a company president told those in attendance at the annual fall meeting of the Urban Land Institute, because “builders won’t make money doing things the way they used to,” Orleans Homes CEO George E. Casey Jr. said.
At the meeting, Casey chaired a panel titled “Not Standing Still: What Builders are Actually Changing to Meet the New Reality,” during which he said builders must accept the current level of new, for-sale home activity as the “new normal” for a while.
“At least there’s a business, even at current levels of activity,” Casey added. “Home-builders must figure out how to make money in this new environment. It is not impossible to do, but it will take a level of innovation and out-of-the-box thinking that is normally more associated with start-up tech companies than with home-builders of the past.”
“Those who do figure it out,” Casey said, “will be best positioned to prosper when a more robust market does return. And make no mistake, it will return.”
Casey claimed Orleans is focused on four concepts he says are crucial to being a successful builder in the 21st century:
- Market niche-focused. “Smart builders are using research, rather than guessing, to determine what their buyers want. With sound research, we can focus on the individual market niches for each neighborhood that make the most sense. One size does not fit all in this world.”
- Operational excellence. “We must be at the top of our game at all times. The quality and speed with which we build are critical to our success. Our sales staff has to know how to relate to customers in solving their home and neighborhood needs. If we create happy customers by making their experience with Orleans simple and personal, it will be the right business model for both of us.”
- Organizationally efficient. “In order to be more productive, we must be a flatter organization that uses technology more, both to communicate internally as well as with our core customers.”
- Excellent stewards of capital. “The days of cheap debt capital are gone. We have to be globally competitive in the returns on equity we generate for investors by doing our business in new ways that create high value for customers. We must build discipline into everything we do. If we do that, we create the highest probability of continuing as a business and showing how a new, 93-year-old company can grow.”
Casey joined Orleans in February 2011 after the company reorganized. It operates 66 communities in 10 markets, including several in Pennsylvania.
This article was originally published on the Polley Associates‘ blog
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